HAP scheme - pros and cons for a landlord?

Cash_Q

Hi,
My colleague rents out her apartment to a tenant who is in receipt of rent allowance and has lived there for a number of years.

The tenant contacted her to say she may be better off on HAP and asked if my colleague is open to this.

Rent has never been missed so far and my colleague is happy with the tenant. She may be selling the apartment in the next year or two.

What are the pros and cons of HAP from a landlord's perspective?

Grumpypants

The main risks come with an unknown tenant. The fact she knows, and is happy with, the current one reduces this.

They might look to sign a 5 year contract but selling is a valid claim to cancel the contract.

You usually get 92% of the market rate and still take on all the risk/cost. There is an alternative long term lease that gives you 80% of the rent but the council take over the landlord role.

The selling point they use is that the council pays the rent not the tenant so it is "garunteed" if they move out. However recent reports suggest that if the tenant stops paying their portion to the CC that the CC stops paying you.

So make sure to query that. And give the contract a good read. Make sure they dont lock the rent for the period as you wont be able to review it down the line if prices keep going up.

The Student

Cash_Q wrote: »

Hi,
My colleague rents out her apartment to a tenant who is in receipt of rent allowance and has lived there for a number of years.

The tenant contacted her to say she may be better off on HAP and asked if my colleague is open to this.

Rent has never been missed so far and my colleague is happy with the tenant. She may be selling the apartment in the next year or two.

What are the pros and cons of HAP from a landlord's perspective?

You are not guaranteed the rent on HAP. If the tenant stops paying the council then the council stop paying you.

murphaph

Grumpypants wrote: »

The main risks come with an unknown tenant. The fact she knows, and is happy with, the current one reduces this.

They might look to sign a 5 year contract but selling is a valid claim to cancel the contract.

You usually get 92% of the market rate and still take on all the risk/cost. There is an alternative long term lease that gives you 80% of the rent but the council take over the landlord role.

The selling point they use is that the council pays the rent not the tenant so it is "garunteed" if they move out. However recent reports suggest that if the tenant stops paying their portion to the CC that the CC stops paying you.

So make sure to query that. And give the contract a good read. Make sure they dont lock the rent for the period as you wont be able to review it down the line if prices keep going up.

You're talking about RAS (rental accommodation scheme).

HAP is essentially the replacement for RS (rent supplement) and RS is going to be retired anyway so the LL will have no choice but to accept it. I see no disadvantages compared to RS which this tenant is already on.

In fact HAP is slightly better than RS because the amount is paid to the LL directly and the tenant can't be tempted to spend it down the bookies. It also allows the rent to be set higher than the strict RS rent limits and the tenant can legally pay the difference (top up).

murphaph

The Student wrote: »

You are not guaranteed the rent on HAP. If the tenant stops paying the council then the council stop paying you.

Same with RS which the tenant is already on. No extra risk here.

KellyXX

Tell them to have a read of this thread when deciding whether or not to believe that the council will stick to their own rules.

https://www.boards.ie/vbulletin/showthread.php?t=2057833709

It looks like the council will happily encourage the tenants to screw over the owner once they get them into the place, and not only that, but are encouraged and enabled to screw the landlord by the government.

murphaph

KellyXX wrote: »

Tell them to have a read of this thread when deciding whether or not to believe that the council will stick to their own rules.

https://www.boards.ie/vbulletin/showthread.php?t=2057833709

It looks like the council will happily encourage the tenants to screw over the owner once they get them into the place, and not only that, but are encouraged and enabled to screw the landlord by the government.

In fairness while that story is disgraceful, there is no increased risk of overholding for the OP. The tenant is already on RS.

californiabear

There are significant cons to watch out for as a landlord with HAP:
- if the tenant doesn't pay their local authority rent, you don't get paid
- rent is paid a month in arrears, so not getting paid is an even bigger issue
- local authority requires tax compliance certs from landlord
- local authority can inspect the property at any time and can require works to be done at the landlord's expense
In short, the local authority expects the landlord to take all of the risk.

KellyXX

murphaph wrote: »

In fairness while that story is disgraceful, there is no increased risk of overholding for the OP. The tenant is already on RS.

Good tenants can always turn bad when they Vista if having to leave their rented property becomes real. I myself have experienced this. When told move in got really upset, went to threshold, who encouraged me to basically overhold and make life really hard for my landlord, who had always been on the level.

Thankfully I saw sense eventually and copped on and all parties concerned are now happy.
Buy having three parties in the relationship is what you will have with hap . And that is never good.

Tenigate

Rents paid a month in arrears?

If that's the case I'd be looking for a deposit of 2 months upfront.

Gumbo

It’s paid on the last Wednesday of every month.
I got the full market rent and also got 2 months deposit up front.
I knew my tennant so I was comfortable taking it on.

Nomis21

Conditions are different in Dublin where the council is more conciliatory regarding payment to the Landlord.

murphaph

californiabear wrote: »

There are significant cons to watch out for as a landlord with HAP:
- if the tenant doesn't pay their local authority rent, you don't get paid
- rent is paid a month in arrears, so not getting paid is an even bigger issue
- local authority requires tax compliance certs from landlord
- local authority can inspect the property at any time and can require works to be done at the landlord's expense
In short, the local authority expects the landlord to take all of the risk.

The LL can insist that there is no interruption to the current rent, so the HAP payment is effectively in advance.

The rest of your points apply to RS except the tax clearance certificate which is a formality and you can nowadays give the local authority an access code where they can check your tax clearance online and you don't need to actively provide one every year.

Inspections are the same now for private rented and RS or HAP or RAS. I had one in January for a RAS house.

I'm not a fanboy of any of these schemes but there really is no increased risk to the LL when moving from RS to HAP.

murphaph

KellyXX wrote: »

Good tenants can always turn bad when they Vista if having to leave their rented property becomes real. I myself have experienced this. When told move in got really upset, went to threshold, who encouraged me to basically overhold and make life really hard for my landlord, who had always been on the level.

Thankfully I saw sense eventually and copped on and all parties concerned are now happy.
Buy having three parties in the relationship is what you will have with hap . And that is never good.

A tenant who is going to overhold will do it whether they are on HAP or RS.

RAS is a true 3 party arrangement (all 3 parties sign the contract) and I agree with you that it's a bad scheme because of this but HAP is really not a 3 party arrangement. The council just pays the rent for the tenant. You can treat the tenant like any other but we're getting off topic here...

The OP already has an RS tenant. The question is, is there a downside to moving to HAP for this tenant and I genuinely do not see any. In fact it's slightly better than RS because rent limits are not set in stone and top ups are legal and the rent is paid directly from council to LL, never via the tenant.

January

californiabear wrote: »

There are significant cons to watch out for as a landlord with HAP:
- if the tenant doesn't pay their local authority rent, you don't get paid
- rent is paid a month in arrears, so not getting paid is an even bigger issue
- local authority requires tax compliance certs from landlord
- local authority can inspect the property at any time and can require works to be done at the landlord's expense
In short, the local authority expects the landlord to take all of the risk.

Surely if the work needs to be done to get it up to code then it should be done at the landlords expense? Suppose it saves the tenant being scared to ask the landlord to fix something because they've been threatened with eviction if they do... A friend of mine was told that if she asked for one more thing to be fixed the landlord was selling up and she'd be homeless, she's currently without a working boiler because of it.

L1985

January wrote: »

Surely if the work needs to be done to get it up to code then it should be done at the landlords expense? Suppose it saves the tenant being scared to ask the landlord to fix something because they've been threatened with eviction if they do... A friend of mine was told that if she asked for one more thing to be fixed the landlord was selling up and she'd be homeless, she's currently without a working boiler because of it.

In all fairness some of the regulation around HAP are not worth the cost to the landlord. We had a house built in the 70s and one of the regulation was to put a vent in each room. Simply put we couldn't afford to spend a five to ten K to get it up to spec for HAP and a lot of landlords are surely in the same boat. Nothing wrong with the house but it was older and the rent the tennant paid reflected that.

Nomis21

January wrote: »

Surely if the work needs to be done to get it up to code then it should be done at the landlords expense? Suppose it saves the tenant being scared to ask the landlord to fix something because they've been threatened with eviction if they do... A friend of mine was told that if she asked for one more thing to be fixed the landlord was selling up and she'd be homeless, she's currently without a working boiler because of it.

Eviction is often the same result if the landlord can't afford the repairs needed to conform with HAP and then the council stops paying the Landlord and then the tenancy ends that way.

student7890

murphaph wrote: »

The LL can insist that there is no interruption to the current rent, so the HAP payment is effectively in advance.

Can anyone clarify this?

Most if not all landlords now ask for rent in advance.
From the Hap website:
"When the application is approved, the local authority will start making HAP payments on the last Wednesday of each month directly into your bank account subject to the scheme’s conditions. This covers the period of occupation of the property by the HAP tenant for that calendar month."

My understanding of this is that rent is paid in arrears with hap. So if a landlord has previously been paid in advance then the landlord has to insist on advance payments?
Doesn't sound very smooth sailing for nervous tenents..

crossmolinalad

californiabear wrote: »

There are significant cons to watch out for as a landlord with HAP:
- if the tenant doesn't pay their local authority rent, you don't get paid

?????????????


Im on hap and I pay the counsel nothing myself
At the post office they take it automaticly from the weekly payments
Had to sign for that otherwise would get no hap

Foweva Awone

crossmolinalad wrote: »

?????????????


Im on hap and I pay the counsel nothing myself
At the post office they take it automaticly from the weekly payments
Had to sign for that otherwise would get no hap

Yeah but you're getting paid through the post office, many others get paid into their bank account and deductions come from there. If the person has withdrawn/spent the money before the payment comes out, the council obviously don't get it that week.

emeldc

L1985 wrote: »

In all fairness some of the regulation around HAP are not worth the cost to the landlord. We had a house built in the 70s and one of the regulation was to put a vent in each room. Simply put we couldn't afford to spend a five to ten K to get it up to spec for HAP and a lot of landlords are surely in the same boat. Nothing wrong with the house but it was older and the rent the tennant paid reflected that.

Yep, mine was inspected for HAP.

ECTI cert
RGI cert
BER cert
Expelair fan in the kitchen even though it's not on an outside wall.
Fire blankets
Fire extinguishers
Fire alarm certs

The list goes on. Mind you, that was a year ago and they haven't followed up on it since. But when they do it wont be cheap. I'm happy enough with the tenant but I'll be avoiding HAP like the plague next time around.

KneonK

Its Probably worth nothing here that the regulations involved in an inspection are the Housing (standards for rented houses) regulations 2017. Every landlord should be aware of them just like any business owner should be aware of any law directly affecting their business, whatever it may be. There are also regulations involved in rent books which are enforced.

It's not the HAP regulations. The local EHO's can inspect any kind of rented dwelling! Be it HAP or not.

ted1

KneonK wrote: »

Its Probably worth nothing here that the regulations involved in an inspection are the Housing (standards for rented houses) regulations 2017. Every landlord should be aware of them just like any business owner should be aware of any law directly affecting their business, whatever it may be. There are also regulations involved in rent books which are enforced.

It's not the HAP regulations. The local EHO's can inspect any kind of rented dwelling! Be it HAP or not.

There’s minimum standard required to rent out a house, HAP have higher standards

emeldc

KneonK wrote: »

Its Probably worth nothing here that the regulations involved in an inspection are the Housing (standards for rented houses) regulations 2017. Every landlord should be aware of them just like any business owner should be aware of any law directly affecting their business, whatever it may be. There are also regulations involved in rent books which are enforced.

It's not the HAP regulations. The local EHO's can inspect any kind of rented dwelling! Be it HAP or not.

With the exception of the BER cert very little if any of the other stuff I’m being asked for would apply if renting to a private tenant.

Old diesel

KneonK wrote: »

Its Probably worth nothing here that the regulations involved in an inspection are the Housing (standards for rented houses) regulations 2017. Every landlord should be aware of them just like any business owner should be aware of any law directly affecting their business, whatever it may be. There are also regulations involved in rent books which are enforced.

It's not the HAP regulations. The local EHO's can inspect any kind of rented dwelling! Be it HAP or not.

So why are landlords reporting different standards for HAP?????.

What's going on.

They can inspect ANY property.

BUT is there two different rule books in operation and why.

Let's try this a different way - if HAP standards are reasonable - how come a lower standard is acceptable for private rental.

All the big bills are being reported for HAP properties with retrofitting of vents in each room etc.

There is also the issue of what happens in the following situation.

1) house fails HAP.

2) you are obliged to accept HAP.

3) you can't afford to upgrade the property.

4) you took on a tenant a year ago and the inspection was yesterday. What happens now.

5) your builder friends are telling you the house is absolutely perfect.

All of above quickly leads on to

6) if you are selling the house - you can terminate the tenancy. No big HAP bill, done with HAP. A property less on rental market.

What's clearly needed urgently is transparency.

1) why does a different standard apply to HAP properties.

2) why no support to landlords in meeting the standards. Each property that fails HAP is a potential loss to the rental market as many will look at the risk of keeping the property as a rental as too high.

3) what is the basis for applying a higher standard. What's the evidence that the upgrades improve the property.

Nomis21

I am being evicted because the LL can't afford upgrades that HAP insist on. I lived here 7 years and now facing homelessness. Thank you HAP.

Old diesel

There is actually a longer term need to upgrade many properties in terms of energy efficiency in a climate change context.

Reducing the energy demand is actually a way of helping meet emissions targets and the like.

But HAP appear to be making a complete mess of whatever it is they want to do.

I actually think they havent a clue what they are asking for or why.

KneonK

That's actually quite interesting. I have never heard of a Landlord being asked for a BER certificate by an inspector during a routine HAP or private rental inspection any sort. In fact in my experience the phrase "HAP inspection" is redundant as there are only private rented house inspections.

I have also never heard of differening standards between either inspection. The same laws apply to both therefore should be equally enforced.

It might be worth asking the enforcing Local Authority for a copy of the regulations and whatever guidance documents they are using. It looks like there is a lack of consistency between different authorities. Even ask straight up "where in the regulations does it say thst i need to do this?". It's not fair to be held to a higher standard.

As a side note regulation 8 (1) clearly states for passive ventilation in each habitable room so I guess that's a fair request.

emeldc

KneonK wrote: »

That's actually quite interesting. I have never heard of a Landlord being asked for a BER certificate by an inspector during a routine HAP or private rental inspection any sort. In fact in my experience the phrase "HAP inspection" is redundant as there are only private rented house inspections.

I have also never heard of differening standards between either inspection. The same laws apply to both therefore should be equally enforced.

It might be worth asking the enforcing Local Authority for a copy of the regulations and whatever guidance documents they are using. It looks like there is a lack of consistency between different authorities. Even ask straight up "where in the regulations does it say thst i need to do this?". It's not fair to be held to a higher standard.

As a side note regulation 8 (1) clearly states for passive ventilation in each habitable room so I guess that's a fair request.

In my case it's an apartment with open plan kitchen cum dining/living room. There is ventilation in 'the room' but a separate expelair fan has been requested for the kitchen area. It will mean channeling through the bathroom, hallway, and a bedroom to get to an outside wall. But if I don't do it my tenant might suffocate with the smell of her own cooking. It's a fuggin' nonsense.

KneonK

emeldc wrote: »

In my case it's an apartment with open plan kitchen cum dining/living room. There is ventilation in 'the room' but a separate expelair fan has been requested for the kitchen area. It will mean channeling through the bathroom, hallway, and a bedroom to get to an outside wall. But if I don't do it my tenant might suffocate with the smell of her own cooking. It's a fuggin' nonsense.

That does sound like a pain. I think it's reg 7 (2)(b) that states that cooking fumes need to be extracted to the outside air via some form of mechanical extraction, so thats separate to the ventillation requirements.

sharon68

I have tenants on RS who are looking to move to HAP.
What are my rights as a landord - can I refuse.
Already stuck with rent far below market rates due to RS limits, increasing market etc.